Abstract

This is an analytical study which aims to gauge the extent to which international treaties have been effective in directing foreign investment to Iran. The two types of treaties studied here include Bilateral Investment Treaties and Double Taxation Agreements. Data as to the amount of investment in Iran as well as some information regarding the
domestic investment regulatory framework in Iran is presented. The country has experienced widely different attitudes towards investment in the last 30 years because of its domestic political changes and, of course, in response to international developments. Upon recovering from the initial nationalistic shock of the 1979 revolution, Iran has engaged in many international instruments in the last 15 years and has also made several changes to its domestic fiscal and investment laws to provide foreign investors with a more favourable investment climate. These attempts have partly succeeded in the sense that there has generally been an upward trend in the amount of foreign investment channelled to Iran since 1994. This amount, however, is still much lower than is the norm
for a country of the size and natural resources of Iran. Through investigating different impediments to foreign investment in the country, the study finds that overwhelmingly political and non-legal factors such
as the relationship between Iran and the West and the attitude of the Iranian administrations to international trade carry much greater weight than merely concluding treaties. Despite this, the number of treaties concluded could be a good indicator of the political climate of the
country at any given time and it can be seen that the government’s plans for attraction of foreign investment have always been clearly more successful throughout periods when more treaties were signed.

Item Type:

MPRA Paper

Original Title:

The Effectiveness of international investment instruments on the amount of foreign investment (a case study of Iran)

Bilateral treaty of encouragement and protection of investment betweenthe Islamic Republic of Iran and the Kingdom of Sweden ( 5 December 2005) Act, Islamic Parliament of Iran, Ratified on 17 April 2006.

Bilateral treaty of encouragement and protection of investment between the Islamic Republic of Iran and the Republic of South Africa (3 November 1997) Act, Islamic Parliament of Iran, Ratified on 31 October 2000.

Bilateral treaty of encouragement and protection of investment between the Islamic Republic of Iran and the Republic of Macedonia( 12 July 2000) Act, Islamic Parliament of Iran, Ratified on 31 December 2001.

Bilateral treaty of encouragement and protection of investment between the Islamic Republic of Iran and the Republic of Indonesia( 2 June , 2005) Act, Islamic Parliament of Iran, Ratified on 25 July, 2007.

Bilateral treaty of encouragement and protection of investment between the Islamic Republic of Iran and the Republic of Yemen( 29 February 1996) Act, Islamic Parliament of Iran, Ratified on 14 May 2000.

Bilateral treaty of encouragement and protection of investment between the Islamic Republic of Iran and the Government of Kuwait( 13 February 2006) Act, Islamic Parliament of Iran, Ratified on 27 August 2007.

Bilateral treaty of encouragement and protection of investment betweenthe Islamic Republic of Iran and the Kingdom of Sweden( 31 July 1994 ) Act, Islamic Parliament of Iran, Ratified on 5 November 1996.

General Policies of Article 44 of the Islamic Republic of Iran Constitution, Exigency Council May 22, 2005.
The Constitution of the Islamic Republic of Iran, The Constitutional council of wise experts, 1979.

The Foreign Investment Promotion and Protection Act (FIPPA),
Exigency Council, 2002. The law for the ownership of immovable property by foreign nationals, Iranian National Assembly, 1921.

The law on Attraction and Promotion of Foreign Investment (LAPFI), The Iranian National Parliament, 1955.

Organization for Economic Cooperation and Development: Draft Double Taxation Convention on Income and Capital: Report of the OECD Fiscal Committee (Paris, 1963),

The United Nations model convention, UN General assembly,
Amsterdam, 1980.

Secondary Sources:
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